Boosting Nigeria’s gemstones industry for increased revenue

Diamond, the most valuable gemstone in the world today, changed the face of Botswana. Before its discovery in that country in 1966, Botswana was a poor, agrarian economy. However, as of 2014, annual Gross Domestic Product per capita growth rate (one of the highest in the world), had maintained a consistent growth trajectory of 5.9 per cent for 48 years, since 1966. While diamonds impacted Botswana the most through mining, Israel’s Ramat Gan district holds its own through processing and trade of the gem, most of which it buys rough from gem-producing countries. The highly developed Israeli Diamond Exchange attracts about 330,000 visitors to that country yearly, providing employment for over 20,000 families and contributing an annual income of an estimated $800m to the nation.

Nigeria is rich in gemstones but has not stirred itself enough to maximise their potential. Lamenting on the undeveloped state of the subsector, the Head of Civil Service of the Federation, Mrs. Winifred Oyo-Ita, had noted at a forum in 2014 that, “There is no official market for gemstones display in Nigeria, neither has there been any estimated reserve of the quantity being mined or traded,” adding that, “A Nigerian blue sapphire that weighed 4.03 carats was sold for $8,625 in the United States of America recently. That means it cost about $2,140 per carat. It therefore shows that good quality Nigerian sapphire can fetch a lot of money. One kilogramme of polished sapphire is 5000 carats, hence 5,000 by 2,140 equals N2.1bn, which is equivalent of 214,000 barrels of crude oil at $50 per barrel.”

Whatever progress other nations have made with their gemstones resources is possible here given the diversity and quality of and the spread in occurrence of coloured stones in the country. Instructively, diamonds and other coloured stones were at par before the 1940s. Diamonds became spectacularly priced when De Beers Miners marketed it aggressively as a superior stone; increasing its value and status with the four iconic words, “A diamond is forever’. Nevertheless, some coloured stones can give diamonds a run for their money, especially when the rocks are weighty and have been properly cut.

Montepuez ruby mine in Mozambique raked in a record $33.5m in its first auction in June 2014 that almost defrayed all start-up investments, an impressive figure that was outstripped by its second auction at the end of the year by $9.8m. According to Jean Michelou of ICA, cut red tourmalines can sell for over $1, 000 per carat, adding that emeralds, rubies and sapphires which Nigeria is well endowed with (I am not sure of rubies) are actually the most monetarily valuable gemstones. So, even without diamonds, Nigeria’s coloured stones are well-rated, according to Michelou, who was hired by the Federal Government in 2010 as an international consultant to the now silent the Gemstone Development Programme, which had planned to build gemstone centres in Ibadan and Jos.

He had mentioned at the time, during a stakeholders conference, that the programme would work towards making Nigeria an international gems centre with requisite grading capacity that would attract buyers from across the world to Nigeria to buy stones.

I have heard rumours of the presence of Kimberlite pipes in Nigeria from experienced artisanal dealers, but this is yet to be concretely proven. Unfortunately, given the level of stealth and neglect associated with the subsector, it is possible for those who have found it, if ever it existed, to keep unearthing it quietly for peanuts. Gemstones mined in Nigeria, mostly by artisans, are often smuggled out of the country in their raw form; whereas, according to the Director, NIMG, Umar Bamali, with value addition, they can earn 500 times more revenue. A visitor to a 2014 workshop on gemstones processing I organised in 2014 came with stones he had taken to Sri Lanka for cutting because he did not know that there are now lapidaries within. Unfortunately, the stones were poorly cut for him by commercial cutters in that country and he was finding it difficult to sell.

Nigeria urgently needs to standardise gems mining in the country, train lapidaries and establish standard buying houses. Thailand with a population of 60 million people, compared to Nigeria’s estimated 170 million, employs 25 million people in its gemstone industry. A good part of this population are employed as professional cutters in Bangkok, which has developed into one of the most popular international gemstone cutting centres like Idar Oberstein (Germany), Bogota (Columbia), Teofilo Otoni (Brazil), Hong Kong, Ramat Gan (Israel), Jaipur (India), Nairobi (Kenya), and Johannesburg (South Africa). About 500,000 Thais are also employed as hobbyist gem-cutters who operate from their homes as a means of supplementing their income.

The Federal Government has, through World Bank assistance, trained lapidaries at the Nigerian Institute of Mining and Geosciences and equipped the agency to build local capacity through training in states and Local Governments, as well as development agencies like the National Youth Service Corps and Bank of Industry. The government needs to take advantage of this investment to deepen the nation’s under-performing gemstones industry.

There is no reason why Nigeria should not take over from Israel as Sapphire and Emerald International Cutting Centre in view of our immense material and human resources. This is a new area of foray for discerning entrepreneurs.

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